Demand for new homes strong in the provinces
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The provincial property market has been enjoying strong demand following the government's policy to invest Bt2 trillion in land-transportation networks in major regions, according to the Agency for Real Estate Affairs.
Sophon Pornchokchai, president of the agency, said recently that the demand for residential projects upcountry was real rather than speculation.
For example, in Phuket, 15,500 condominium units worth Bt34.6 billion have been launched as of last month and 75 per cent or Bt23.7 billion worth have been sold. Sales average 1,630 units a month, so the inventory in the market would take about 2.3 months to sell out.
Chiang Mai had 10,700 new residential units worth Bt23.4 billion as of March and 71 per cent worth Bt16 billion have been sold. The absorption rate is 2,010 units a month, so the inventory will take only one-and-a-half months to be depleted.
The Pattaya market had 122,600 new condos worth Bt321 billion. Already 75 per cent worth Bt235 billion have been sold. Demand for residences averages 5,850 units a month. The market there now faces 5.2 months of inventory.
Khon Kaen had 5,500 condos launched worth Bt8.95 billion, of which 78 per cent worth Bt6.8 billion have been sold. Absorption averages 1,500 units a month, so inventory will last only 0.8 month.
Hua Hin and Cha-Am have 17,600 condos worth Bt58.7 billion, of which 75 per cent worth Bt45 billion have been sold. Take-up averages 4,500 units a month. Inventory will take 2.7 months to sell.
Based on the agency’s survey, demand for condos upcountry is not driven by speculation, so the market will not face a bubble like before the economic crisis in 1997.
“In my view, the provincial property market is booming in line with infrastructure expansion and economic growth. There’s no need for measures to control this market,” he added.
